Successfully investing in real estate all comes down to having the right strategy. Every investment strategy has its pros and cons in terms of risk and profitability, so identifying potential niches, areas, and properties to invest in at the right time is fundamental. Like any other investments there is a correct way to do it. Knowing what to do and what not to do is vital.
Here are some of the most common real estate investment mistakes and how to avoid them:
Lack of planning
It’s important to have a plan in place before you start investing and be clear with the how, when and where. Pick your investment model and start looking at a property that fits within your strategy. Stick to the plan even if it looks a bit rough at the beginning, you will maneuver it as you move forward. But at the same time be ready to make adjustments as the market situation changes. Real estate is cyclical in nature and being flexible can bring prolific returns and avoid pitfalls.
Research and act swiftly
To make a good return on your property you need to make sure you have paid the right price at the time of buying. Research average prices in the area/areas you are interested in and when you find a good deal, close without much delay. Well priced properties don’t stay in the market for long, so you need to act swiftly. Collect reports of recently sold properties and use them to negotiate the price with sellers. Make offers that are realistic but don’t let the negotiation spoil the deal.
Thinking short term
People with different levels of income have succeeded in building real estate empires with the right strategy. No matter what type of real estate investment you’re involved in, you have to know that it will take time and effort before your investment pays off. We have heard from real estate moguls time and again that patience is the key to real estate profits.
There are investing opportunities in both residential and commercial real estate and in any market situation. You can choose a promising off-plan project or a ready property. The options are many and you don’t need to limit yourself to a single property type, segment or area. The good thing about real estate is its ups and downs and the best profits in real estate have been made in a down market by investors who think counter-cyclically and buy when everyone else is selling.
Overlooking costs and miscalculations
Buying and maintaining an investment property comes with added costs. Apart from the basic price of the property, there are other costs involved initially and as you continue to manage the property. Transfer fees, taxes, brokerage fees and maintenance expenses are some of the basic costs you need to have in your initial calculations.
No matter what strategy you choose for your real estate journey, avoiding these fundamental mistakes will save you a lot of hassle and help you to make prolific returns.